Not the what, but the when surprised two local economists reacting to a conclusion the United States is in a recession that began last December.
Avista Corp. economist Randy Barcus and Eastern Washington University professor Grant Forsyth said they would have said the slowdown started last spring. Forsyth said he accepted the finding of the National Bureau of Economic Research after reviewing the analysis of its “business cycle dating committee,” but Barcus was less convinced.
Given the volatility of some of the numbers used, and the likelihood some would change, Barcus said the committee might modify its findings later. He noted that members were veering from the long-held notion that a recession, by definition, could not be called until there were two consecutive quarters of economic contraction.
Economic activity shrank in the last quarter of 2007, grew in the first and second quarters of this year, then shrank in the third.
Phil Kuharski, a longtime tracker of the local economy, noted that the committee stressed some economic measures and downplayed others. The shift suggests the analysis has become more politicized, he said.
“The reality is, on an annual basis, there was no recession in 2008,” Kuharski said.
Barcus said the committee’s report “validates all the jabbering” about a recession batted about in the media for months, even when the numbers pointed to growth, not contraction.
But he did not disagree that the economy is slowing, even if activity in the Inland Northwest has held up better than it has in other regions.
“The mix of business here is such that we’re on a different cycle,” Barcus said. “We’re right at a recession here locally, but it’s much less severe.”
Forsyth said the Northwest’s exports have helped insulate it from some of the economy’s difficulties. But slowdowns in Japan and China will be damaging, he said.
He downplayed the importance of Monday’s report, which looks back a year. Forsyth instead pointed to unemployment numbers due out Friday that will tell more about where the economy might be heading.
“The question will be how deep will (the recession) be, and how long it will be,” he said.